Question 11 (1 point)

At what rate must $1050 be compounded for it to grow to $1500 in 7 years?

Question 11 options:

	4.2%
	5.96%
	4.92%
	5.23%

Question 12 (1 point)

You are looking to invest some savings at an annual rate of 5.0% that will compound every 4 months. The effective cost is as follows:

Question 12 options:

	5.2%
	5.10%
	5.08%
	5.15%

Question 13 (1 point)

Which of the following affect an asset's value to an investor?

I. Amount of an asset's expected cash flows

II. Timing of an asset's cash flows

III. The asset's past cash flows

IV. Investor's required rate of return

Question 13 options:

	I, II, IV
	I,III, IV
	I, II ,Ill
	I, II,III,IV

Question 14 (1 point)

An investor's required rate of return is a function of the following:

Question 14 options:

	risk-free rate of interest plus the market risk premium
	risk-free rate of interest plus a risk premium.
	risk-free rate of interest plus an inflation premium
	risk premium the investors feel is necessary to compensate for the riskiness of the asset.

Question 15 (1 point)

In terms of risk to the security holder, which of the following is least risky?

Question 15 options:

	ordinary shares of large companies
	corporate bonds
	10-year government bonds
	ordinary shares of small companies

Question 16 (1 point)

A $1,000 par value 10-year bond with a 10% coupon rate recently sold for $980. The yield to maturity is:

Question 16 options:

	less than 10%
	greater than 10%
	10%
	cannot be determined due to insufficient data

Question 17 (1 point)

The specified amount of interest paid by the issuer of a bond at periodic intervals is commonly called _____________________ and this rate can / is ______________________.

Question 17 options:

	coupon: vary
	coupon: fixed
	face value; vary
	face value; fixed

Question 18 (1 point)

Standard deviation measures the:

Question 18 options:

	systematic and unsystematic risk of a individual security
	systematic risk of a individual security
	average return of an asset's returns
	unsystematic risk of a individual security

Question 19 (1 point)

Callous Ltd bonds pay an annual coupon rate of 7%. If the investor's required rate of return falls below the annual coupon rate, the bonds will be priced at:

Question 19 options:

	par value
	a premium to par value
	a discount to par value
	it cannot be determined from the information provided.

Question 20 (1 point)

The process to calculate standard deviation is:

Question 20 options:

	Firstly, compute the future returns, then compute the variance and lastly square root the variance.
	None of the listed options.
	Firstly, compute the average return, then compute the variance and lastly square root the variance.
	Firstly, compute the average return, then compute the variance and lastly square root the standard deviation.